By Francis Ogwo
Following the controversy and widespread reactions to the recent ban of Cryptocurrency transactions in Nigeria by the Central Bank of Nigeria, the Securities and Exchange Commission (SEC) has said that there is no policy conflict between the capital market apex regulator and the Central Bank of Nigeria (CBN) over the ban in the banking industry.
This was contained in a statement on its website in which the SEC explained that contrary to the perceived policy conflict across boards, they were no inconsistencies.
In recognition of the fact that digital assets might have the full characteristics of investments as defined in the Investments and Securities Act 2007, it stated that trading in such assets falls under SEC’s regulatory purview, except proven otherwise.
It stated, “The primary objective of the Statement was not to hinder or stifle innovation, but to establish standards of ethical practices that ultimately make for a fair and efficient securities market.
“The SEC made its statement at the time, to provide regulatory certainty within the digital asset space, due to the growing volume of reported flows.
“Subsequently, in its capacity as the regulator of the banking system, the CBN identified certain risks, which if allowed to persist, will threaten investor protection, a key mandate of the SEC, as well as financial system stability, a key mandate of the CBN.”
In light of these facts, “we have engaged with the CBN and agreed to work together to further analyse, and better understand the identified risks to ensure that appropriate and adequate mitigants are put in place, should such securities be allowed in the future.”
For the purpose of admittance into the SEC Regulatory Incubation Framework, the assessment of all persons (and products) affected by the CBN Circular of February 5, 2021 is hereby put on hold until such persons are able to operate bank accounts within the Nigerian banking system.
The planned implementation of the SEC Regulatory Incubation Guidelines for FinTech firms who intend to introduce innovative models for offering capital market products and services will continue.
The SEC will continue to monitor developments in the digital asset space and further engage all critical stakeholders with a view to creating a regulatory structure that enhances economic development while promoting a safe, innovative and transparent capital market.
Recall that some days back, the CBN insisted that its recent restriction was not new, but only a reminder of the earlier circular that was dated January 2017.
This decision by the CBN had attracted widespread criticisms on the ban as many had said it was a difficult time in the economy to have placed a ban on crypto which was vital source of investment.
This is also with the current status of the economy amid recession.
